The number of bankruptcy filings for the fiscal year ending March 31, 2003 was ~1.6 million in the United States alone (Levy and LaGana)
At the end of the repayment period, the debtor's outstanding debts are eliminated. Financial experts typically advise that bankruptcy is a last resort option to manage debt (Monroe)
Chapter 11 and Chapter 12 bankruptcy are much less common and will not be discussed in this report. With a Chapter 7 bankruptcy, a court-appointed trustee will divide the debtor's property into "exempt" and "non-exempt" property (Taylor)
Amazon v. Borders Borders Group filed for bankruptcy protection in early 2011 (Wahba, 2011) and began liquidating its assets in July of the same year (Khouri, 2011)
Amazon v. Borders Borders Group filed for bankruptcy protection in early 2011 (Wahba, 2011) and began liquidating its assets in July of the same year (Khouri, 2011)
There shall thus be an official creditors comitte that can collect and deal with confidential information that can be used to file disclousures the process also permits the speedy recocvery and sale of the debtors assets without any interested parties being able to stall proceedings. (Altman; Hotchkiss, 2010) Thus the credit card crash and subsequent financial hardships to creditors and the changes in banking and global commerce necessitated the passing of the law
Entrepreneurs now chose to get employed with larger firms. (Paik, 2010) References Altman, Edward I; Hotchkiss, Edith
Individuals incurring debts from the lenders have put the lenders in a spot by taking recourse to bankruptcy. (Skeel, 2001) Likewise when the firms fold up there is a situation of the stock holders and lenders being unable to recover
(Karamzadeh, 2013) The above mentioned relationship is expressed in the form of ratio of between the group and within the group variance. (Back & Laitinen et al
Effective selection of keywords makes the data collection process efficient and enables the researcher to collect relevant data in an easy manner. (Cooper and Schindler, 1998) The keywords that were deployed for the purpose of this research included, 'using discriminate analysis and other models to predict bankruptcy', 'efficiency of the deployment of discriminate analysis and other models to predict bankruptcy', 'advantages and drawbacks of using discriminate analysis and other models to predict bankruptcy
This discrimination is achieved through the deployment of a statistical rule that maximizes the variance that exists between the groups relative to the variance that exists within the group. (Karamzadeh, 2013) The above mentioned relationship is expressed in the form of ratio of between the group and within the group variance
Logit analysis Logistic regression analysis has also been used to determine the relationship that exists between binary or ordinal response probability variables and explanatory variables. (Klobucnik & Sievers, 2013) By the method of maximum likelihood, the Logit analysis fits the method for logistic regression between binary or ordinal response probability variables and explanatory variables
The function, therefore, is represented as y = f (x). (Makeeva & Neretina et al
This model was commercialized by KMV, which is now referred to as Moody's KMV. (Miller, 2009) This method has an underlying assumption that the equities of the organization can be converted into an option
Using Discriminate Analysis and Other Models to Predict Bankruptcy Introduction There has been a constant increase in the attempts that are made to predict bankruptcy because of the deteriorating consequences that are associated with this phenomenon. (Santos & Cortez et al
Such a methodology consists of a combination of the characteristics of both the qualitative as well as the quantitative research methodology. (Saunders and Lewis et al
Given the fact that the researches up-to-date have used financial ratios extensively. (Serrano-Cinca & Gutierrez-Nieto, 2014) It, therefore, would be worthwhile for the professionals to increase the variety of explanatory variables, to include management practices and the structures of corporate governance while developing a new model to predict bankruptcy
The basic sources of this data include, published books, e-books, published journals, online journal articles, peer reviewed researches and other internet-based sources. (Zikmund, 2003) The data used for the purpose of this research was secondary in nature
The $400 fund was set aside in accordance with accounting rules to cover revenue shortfalls that were expected, as was the case. Taking the $400 million away not only increased the book value of the firm but it also reflected on the firm's revenues (Pulliam & Solomon, 2002)
The laws of the time allowed the debtor to choose between giving his property up or himself as repayment (Amega). The history of bankruptcy law consists of three phases (Duhaime 2007)